Energy Efficient Homes Initiative Increases Housing Affordability for New Homeowners

How do you help new homeowners financially beyond the initial purchase of their homes? One approach is to renovate the homes with energy use and operating costs in mind. Now the question becomes what is the best use of limited renovation funds? City of Lakes Community Land Trust (CLCLT), a nonprofit in Minneapolis committed to providing housing for low to moderate income home buyers, took a proactive approach to this question when they launched their Energy Efficient Homes Initiative.

This initiative helps the organization better integrate and prioritize green building practices in the rehab work done on CLCLT homes. A Metro CERT seed grant was instrumental in starting the Energy Efficient Homes Initiative.

The purposes of a Community Land Trust is to provide access to land and housing to people who are otherwise denied access; to increase long-term community control of neighborhood resources; to empower residents through involvement and participation in the organization; and to preserve the affordability of housing perpetually. Though the program specifics vary among different CLTs, the basic model is the same.

CLTs offer a balanced approach to ownership: the nonprofit trust owns the land and leases it for a nominal fee to individuals who own the buildings on the land. As the home is truly their own, it provides the homeowners with the same permanence and security as a conventional buyer, and they can use the land in the same way as any other homeowner.

In recent years, the majority of CLCLT homes have been purchased through a Homebuyer Initiated Program (HIP) in which the buyer selects the house and CLCLT helps them by providing an affordability investment and rehab. On average, the CLCLT invests $40,000 into homes to address deferred maintenance; safety and code issues; and environmental hazards such as lead.

The CERTs seed grant provided the opportunity to enhance CLCLT’s existing rehab program by integrating energy efficiency measures through a Home Energy Rating System (HERS) analysis. The first step in any building energy efficiency project is an audit. This investigation measures the present state of energy use in the home and identifies areas that need attention. There are a few different types of home energy audits and CLCLT chose one of the most in depth and detailed, the Home Energy Rating System (HERS).

“The primary motivation behind HERS was to see if we could do something beyond the normal energy audit that would help us understand more clearly what a home needed and how best to invest our resources and provide the biggest return on investment for the homeowner” Staci Horwitz, Program Director at CLCLT, explained.

A HERS analysis offers a comprehensive look at the energy efficiency of a home before, during and after the rehab process. The HERS rater reviews the home to identify its energy characteristics, such as insulation levels, window efficiency, wall-to-window ratios, the heating and cooling system efficiency, the solar orientation of the home, and the water heating system. Performance testing, such as a blower door test for air leakage and duct leakage, is usually part of the rating. The final HERS report gives a number rating to the house (0 – 100), showing how it compares to other houses in the nation, and it includes a list of recommendations on how to improve the building’s energy efficiency.

The seed grant money from CERTs was used specifically to pay for HERS energy audits on new CLCLT properties. The goal was to assess 5 – 10 homes with the CERTS seed grant and to improve the energy efficiency of those homes by 15 – 30%.

Horwitz sees many advantages in using the HERS home energy audit. “The HERS rating has been incredibly helpful in educating the homeowners about their home,” says Staci. “It provided us with the understanding we needed to go above and beyond bringing a building to code to create truly energy efficient homes. Having the report informs the dialogue on discussions about energy efficient renovation with the homeowner and also with the contractors working on the house.”

Greater Metropolitan Housing Corporation oversees the rehab process and works closely with the HERS specialist to incorporate the energy efficient measures. Any energy efficient measures that are not prioritized but are identified as beneficial to the homeowner, the longevity of the home, or the energy efficiency of the home will be recommended to the homeowner for completion over time.

Both parties have a clearer view of the scope of the work to be accomplished and the homeowner knows what to look for when the renovation project is completed. With the homeowners now empowered with knowledge of their building they are better advocates for those projects which give the best return on their investment.

The primary challenge for the CLCLT Energy Efficient Homes Initiative has been implementing all the suggestions from the HERS analyses. Because of funding partner obligations, CLCLT is required to prioritize certain aspects of rehab like replacing windows due to the high likelihood of lead contamination even if those strategies have a much slower return-on-investment than other energy efficient elements like insulation. Even with the rehab funding being directed at windows, CLCLT met the 15 – 30% goal of improved energy efficiency in each case.

The community education component of the initiative takes place in the form of one-on-one counseling with homeowners through a post-purchase walk through of the home, a summary of any new controls installed during the rehab and information on maintenance of mechanical systems.

By increasing the energy efficiency of CLCLT homes, the organization is committing not only to reducing the carbon emissions in the community, but to the long-term affordability of land trust homes by decreasing homeowners’ monthly utility bills.

For more information about the City of Lakes Community Land Trust’s Energy Efficient Homes Initiative, contact Staci Horwitz, Program Director at (612) 721-7556 ext. 18 or email Staci@clclt.org.